Designing the commercial sustainability of unprofitable regional airports using system dynamics analysis

Most Japanese regional airports are commercially unstable because the demand for air travel is low and fluctuating. Various management strategies involving airlines and passengers have been designed to sustain operations at regional airports. This paper analyzes regional airports as ecosystems, which is an analogy to the biological ecosystem in evaluating business networks, interactions and evolutions. We have used system dynamics modeling and simulation to propose optimal strategies for sustaining these ecosystems using the example of the Noto-Haneda flight in Japan from 2003 to 2009. We conclude that ticket subsidies combined with measures to enhance non-aeronautical revenue are efficient and effective in assuring the viability of regional airports.